Skip to content

March 1, 2013

Trouble with Third-Party Dealmakers

by uvapreston

http://arstechnica.com/business/2013/02/after-losing-81m-in-q4-2012-groupon-stock-plunges-25-percent/

A few weeks ago, we discussed various third-party services offering point of sale deals.  Some of us were skeptical about the long term success of this increasingly saturated market.  Potential roadblocks include consumer confusion in the face of many options and simply overcoming the inertia that prevents adoption of an unfamiliar service that only offers limited benefits in select establishments.  The above article discusses the erstwhile status of a similar entity, Groupon, known for offering daily deals to local establishments.  Groupon’s stock has tanked in the wake of poor results in Q4, during which the company lost $81.1 million.  Significantly, the article notes that a major source of difficulty stems from the growing cost of revenue.  This condition can be attributed to problems drumming up new and repeat clients as well as declining revenue share on each deal.  Groupon’s business model and product offerings are not inherently consistent and thus partnerships with businesses and customer retention may be hard to sustain.  In addition, as more companies adopt a multichannel approach to customer interaction, they may build in promotions that speak directly to their patrons and foster loyalty.  As a result, both businesses and consumers may find it unnecessary to turn to third-parties such as Groupon to participate in an enticing deal market.

Read more from Uncategorized

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s

Note: HTML is allowed. Your email address will never be published.

Subscribe to comments

Market Insights in Morocco & Ghana

A Global Commerce Immersion

Customer Analytics & Brand Strategy

Creativity is thinking up new things. Innovation is doing new things--Theodore Levitt

%d bloggers like this: